Amending Presidential Decree No. 894 By Changing The Words

MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 648 January 30, 1975

AMENDING PRESIDENTIAL DECREE NO. 894 BY CHANGING THE WORDS

WHEREAS, there is a need to equalize the cost of fuel among those which are generating electric power for residential, commercial and individual uses and those manufacturing "city gas";

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the power vested in me by the Constitution, do hereby order and decree:

Section 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and power and for the manufacture, distribution and sale of city gas shall two per cent (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current and of manufactured city gas.

Such franchise tax shall be payable to the Commissioner of Internal Revenue or his duly authorized representative on...

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Summary of Presidential Decree No. 648

Franchise Tax on Electric and Gas Utilities
- The franchise tax payable by all grantees of franchises to generate, distribute and sell electric current and city gas shall be 2% of their gross receipts from such activities. (Section 1)
- This franchise tax shall be paid to the Commissioner of Internal Revenue and shall be in lieu of all other taxes and assessments on earnings from generation, distribution and sale of electric current and city gas. (Section 1)

Tariff Rates on Petroleum Oils
- Petroleum oils used as fuel for electric power generation and city gas manufacture shall be subject to 20% ad valorem tariff rate. (Section 2)
- Other petroleum oils shall be subject to 10% ad valorem tariff rate. (Section 2)

Tax Credit on Petroleum Oils for Electric Power Generation and City Gas Manufacture
- A refund or tax credit of up to 50% of the duty imposed on crude petroleum oils eventually used for electric power generation and city gas manufacture shall be allowed. (Section 3)
- The tax credit shall be paid or credited under rules prescribed by the Commissioner of Customs with the approval of the Secretary of Finance. (Section 3)

Passing on Savings to Consumers
- All savings realized by electric franchise holders from the reduced franchise tax, tariff reductions and tax credits shall be passed on to the ultimate consumer. (Section 4)
- The Secretary of Finance shall promulgate rules, regulations and a reporting system to implement this provision. (Section 4)

Penalties
- Violation of the provision on passing on savings to consumers shall be penalized by a fine of not more than P50,000 and imprisonment of not more than 6 months. (Section 4)
- The Secretary of Finance may order compulsory price or rate reduction, either prospective or retroactive, for such violations. (Section 4)
- If the offense is committed by a juridical person, the manager or person in charge shall be responsible. (Section 4)

Effectivity
- This Decree shall take effect immediately. (Section 5)